Many people are reimbursed by third parties for their purchases. In many cases, such reimbursement arises from a business relation. For example, an employer may reimburse an employee's purchases that are business related. Similarly, an insurer may reimburse all or some portion of an insured party's medical expenses.
The reimbursing party typically requires documentation to verify (i) that the stated amount was actually spent on the purchase, and (ii) that the purchase is of the type that the reimbursing party is willing to pay for. A party to be reimbursed may submit receipts that support his request for reimbursement. The reimbursing party in turn evaluates the submitted documentation, and approves or rejects the request for reimbursement.
Many people use “card-based” financial accounts, such as credit card accounts and debit card accounts, to pay for their purchases. Such card-based financial accounts can provide a secure, flexible and convenient way to pay for many purchases. Parties that use such card-based financial accounts typically receive paper “charge slips” for each transaction (e.g. a purchase or a refund), as well as monthly billing statements documenting transactions made with the card-based financial account. Accordingly, purchases made with card-based financial accounts can readily support requests for reimbursement.
Unfortunately, known processes for evaluating and approving requests for reimbursement suffer substantial shortcomings. Most reimbursing parties are not able or willing to rapidly process documentation supporting requests for reimbursement. Data entry, bureaucratic procedures and manual evaluation of documentation delay the eventual approval or rejection of a request for reimbursement. In addition, data entry may introduce errors, and documentation may be misplaced by either the reimbursing party or the party to be reimbursed. Consequently, the party to be reimbursed may wait long periods of time after a purchase before receiving the corresponding reimbursement. In addition, the reimbursing party often incurs substantial costs in processing requests for reimbursement.
Further shortcomings are particular to parties that use card-based financial accounts. Charge slips and billing statements typically identify the financial account, for example, by credit card account number. Thus, submitting such documentation reveals the financial account to many parties involved in reimbursement approval, and the financial account may therefor become more susceptible to fraudulent use. Blocking the credit card account number from copies of such documentation can be time-consuming and error-fraught for the party to be reimbursed.
In addition, charges to a card-based financial account may be increased by interest and other penalties if the reimbursing party does not provide reimbursement in a timely manner. Thus, the party to be reimbursed may be forced to pay amounts for which he may never be reimbursed. In addition, even if reimbursement is forthcoming, a card holder may have a large amount of charges to be reimbursed. Consequently, he may be close to his balance limit and unable to apply further charges to his account.
To support reimbursement, many employers provide employees with “corporate” credit cards. Corporate credit cards, issued by banks to employers, enable employees to conduct business at the employer's expense. For example, a corporate credit card may be used to purchase entertainment for clients, supplies and travel services. However, employees may abuse the spending privileges afforded by corporate credit cards. Consequently, many employers must thoroughly audit billing statements to ensure the proper use of corporate credit cards. As described above, processing the documentation that supports a request for reimbursement can be burdensome, time consuming and inaccurate. In addition, some types of corporate cards impose liability for all charges on the reimbursing party, which is often undesirable.
To attempt to limit corporate credit card abuse, some corporate credit cards enable the employer to prevent certain types of purchases. For example, First Bank's “Corporate Relocation Card” allows employers to give their employees corporate credit cards to use when relocating. Employers can prevent use of the corporate credit card at certain merchant types, such as bars and casinos. Typically, the issuing bank stores a list of any SIC codes (Standard Industrial Classification codes) or MCCs (Merchant Category Codes) that have been selected to be disallowed by the employer. When the bank receives a request to authorize a charge on the employee's corporate credit card, the bank verifies that the corresponding merchant code is not disallowed. Unfortunately, preventing use of the corporate credit card at certain merchant types does not prevent the employee from overspending at an allowed merchant.
Some accounting software is designed to make auditing corporate credit card accounts more accurate or efficient. For example, Visa provides InfoSpan 2.0 Intelligent Information Management software for use in managing “Visa Corporate” and “Visa Purchasing” accounts. The software is intended to enable employers to “streamline accounting processes” and “reduce administrative expenses,” as well as “ensure card spending complies with company policy.”
While these products may facilitate the management of corporate credit card accounts, reimbursement will typically remain a lengthy process, and abuse of reimbursement privileges can continue with known systems and methods for reimbursement. It would be advantageous to make the reimbursement process more efficient and convenient for both reimbursing parties and parties to be reimbursed.